Clark, Burton R. "Ch.

1: Entrepreneurial Pathways of University Transformation &

Ch. 7: The Problem of University Transformation", i

Creating Entrepreneurial Universities. Organizational Pathways of

Transformation 1998 ss. 3-8, 127-148

ISBN: 0080433545

Copyright (C) 1998 Pergamon Press

Kopiert med hjemmel i Kopinor-avtalen

 Entrepreneurial Pathways of University
Transformation

Explanation of how five universities in five different European settings went

about changing their character to become more adaptive institutions requires
that we acknowledge the individuality of institutional development.
Accordingly, the five central chapters organize descriptive materials as case
studies in which an understanding of each institution's setting and historic
character is seen as necessary for understanding whatever transformation has
taken place o r is in process. Each account includes what is significantly unique
and peculiar and the role played by particular individuals. The integrated case
reports assert the special character of each of the universities that compose
the empirical base of the study. They portray singular local flavor.
But, as stressed in the introduction, the separate stories are not the com-
manding interest. Common elements found in the case studies allow us to
push beyond unique histories. Together they strongly suggest how universities
that have willed themselves to change differ systematically from those that
remain entirely encapsulated in a traditional mode. This chapter briefly sets
forth these major features.

The Concept of Entrepreneurial University

"Entrepreneurial" is taken in this study as a characteristic of social systems;

that is, of entire universities and their internal departments. research centers,
4 Entrepreneurial Pathways of University Transformation

faculties, and schools. The concept carries the overtones of "enterprise" - a

willful effort in institution-building that requires much special activity and
energy. Taking risks when initiating new practices whose outcome is in doubt
is a major factor. An entrepreneurial university, on its own, actively seeks to
innovate in how it goes about its business. It seeks to work out a substantial
shift in organizational character so as to arrive at a more promising posture
for the future. Entrepreneurial universities seek to become "stand-up" universi-
ties that are significant actors on their own terms. Institutional entrepreneur-
ship can be seen as both process and outcome.
Throughout much of the two years and more of the research, the two terms
"entrepreneurial" and "innovative" were used as loosely synonymous. The
concept of "innovative university" has much appeal. Gentler in overtone, it
also casts a wider net. It avoids the negative connotations that many academ-
ics attach to individual entrepreneurs as aggressive business-oriented people
seeking to maximize profit. When the institutions in this study, together with a
few other universities, established a new all-Europe voluntary association of
highly limited membership in 1996, they had good reason to name it "The
European Consortium of Innovative Universities." But I have chosen
"entrepreneurial" over "innovative" as the organizing conception for this book
because it points more powerfully to deliberate local effort, to actions that
lead to change in organizational posture. Under its banner I can more
appropriately group some processes by which modern universities measurably
change themselves.
University transformation, for the most part, is not accidental or incidental.
It does not happen because several innovative programs are established here
and there within a university: the new approaches can be readily sealed off as
minor enclaves. It does not happen because a solitary entrepreneur captures
power and runs everything from the top-down: such cases are exceptions to
the rule. Universities are too bottom-heavy, too resistant from the bottom-up,
for tycoons to dominate very long. Rather, transformation occurs when a
number of individuals come together in university basic units and across a
university over a number of years to change, by means of organized initiative,
how the institution is structured and oriented. Collective entrepreneurial action
at these levels is at the heart of the transformation phenomenon. Acting from
on-high, national and state systems of higher education are blunt instruments
of significant change; acting from below, individual faculty members or
administrators are limited in what they can do. But groups, large and small -
central and departmental - of faculty and administrators (and sometimes
students!) can fashion new structures, processes, and orientations whereby a
university becomes biased toward adaptive change. Academic groups can also
help insure that academic values will guide transformation, a point that will
appear repeatedly in the institutional narratives. Effective collective
entrepreneurship does not carry a university beyond the boundaries of
academic legitimacy, setting off a down-market cycle of reputation, resources,
 Burton R. Clark 5

and development. Rather, it can provide resources and infrastructures that

build capability beyond what a university would otherwise have, thereby allow-
ing it to subsidize and enact an up-market climb in quality and reputation.
A formal grant of autonomy from patron to institution does not guarantee
active self-determination; autonomous universities may be passive institu-
tions. They may live for the past rather than look to the future. They may be
satisfied with what they have become and do not wish for more. By informal
agreement they may have decided to move in lockstep with counterpart institu-
tions in their region or country, together to sink or swim. They are then biased
toward standing still. Autonomous universities become active institutions when
they decide they must explore and experiment with changes in how they are
composed and how they react to internal and external demands. They sense
that in fast-moving times the prudent course of action is to be out in front,
shaping the impact of demands made upon them, steering instead of drifting.
It is then that they need new organizational elements that together character-
ize the entrepreneurial university.

Pathways of Transformation

How do universities, by means of entrepreneurial action, go about

transforming themselves? Five elements constitute an irreducible minimum: a
strengthened steering core; an expanded developmental periphery; a diversi-
fied funding base; a stimulated academic heartland; and an integrated
entrepreneurial culture.

The strengthened steering core

Traditional European universities have long exhibited a notoriously weak

capacity to steer themselves. As their complexity has increased and the pace of
change accelerated, that weakness has become more debilitating, deepening
the need for a greater managerial capacity. Unambitious universities can ignore
this need and drift with the tides of traditional patronage. Universities that
serve as flagships or elite institutions in their own national or state systems of
higher education can ignore the lack of steering capacity longer than others
and can continue to depend upon their outstanding reputation and political
clout for guaranteed resources and competitive status. But ambitious
universities, and universities concerned about their marginality, and even
their survivability, cannot depend on old habits of weak steering. They need
to become quicker, more flexible, and especially more focused in reactions to
expanding and changing demands. They need a more organized way to
refashion their programmatic capabilities. A strengthened steering core
becomes a necessity. As we shall see, that core can take quite different shapes.
But it must embrace central managerial groups and academic departments. It
6 Entrepreneurial Pathways of University Transformation

must operationally reconcile new managerial values with traditional academic

ones.

The expanded developmental periphery

Enterprising universities exhibit a growth of units that, more readily than

traditional academic departments, reach across old university boundaries to
link up with outside organizations and groups. In one form these units are
professionalized outreach offices that work on knowledge transfer, industrial
contact, intellectual property development, continuing education, fundraising,
and even alumni affairs. In another larger, and more basic, form they are
interdisciplinary project-oriented research centers that grow u p alongside
departments as a second major way to group academic work. Academic depart-
ments based on disciplinary fields of knowledge will go on being important:
their disciplinary competence is essential, too valuable to throw away, and they
have much power with which to protect their own domains. But the depart-
ments alone cannot d o all the things that universities now need to do. Outward-
reaching research centers express nondisciplinary definitions of problems. They
bring into the university the project orientation of outsiders who are attempt-
ing to solve serious practical problems critical in economic and social develop-
ment. They have a certain flexibility in that they are relatively easy t o initiate
and to disband. Constructed to cross old boundaries, the centers mediate
between departments and the outside world.
If a university's trade with external groups is t o continue to evolve, its
infrastructure must keep pace. Anxious to find better tools for coping with
societal demands, entrepreneurial universities take the risk of promoting an
entire new periphery of nontraditional units. As we shall see, substantial
organizational creativity is involved.

The divers~jiedfunding base

To fashion a new change-oriented character, a university generally requires

greater financial resources: it particularly needs discretionary funds. Widening
the financial base becomes essential. since virtually everywhere mainline
institutional support from government, as a share of total budget, is on the
wane. Enterprising universities recognize this trend and turn it to advantage.
They step up their efforts to raise money from a second major source, research
councils, by more vigorously competing for grants and contracts. They set out
to construct a widening and deepening portfolio of third-stream income
sources that stretch from industrial firms, local governments, and philanthropic
foundations, to royalty income from intellectual property, earned income from
campus services, student fees, and alumni fundraising. Third-stream sources
represent true financial diversification. They are especially valuable in provid-
ing discretionary money, beyond overhead charges and top-sliced sums
extracted from research grants.
 Burton R. Clark 7

In the process of increasing income from the second and third streams,
entrepreneurial universities learn faster than nonentrepreneurial counterparts
that money from many sources enhances the opportunity to make significant
moves without waiting for systemwide enactments that come slowly, with
standardizing rules attached. They accept and promote the maxim offered by
two American observers as long ago as the early 1960s: "a workable twentieth
century definition of institutional autonomy [is] the absence of dependence
upon a single or narrow base of support." (Babbidge and Rosenzweig, 1962, p.
158)
The stimulated academic heartland

When an enterprising university evolves a stronger steering core, atzd

develops an outreach structure, and diversifies its income streams, its heartland
is still found in the traditional academic departments formed around
disciplines, new and old, and some interdisciplinary fields of study. Spread
across the operating base of the university as sites of research and particularly
of teaching, the basic units. and their more encompassing multidepartment
faculties, continue to be the places where most academic work is done. Whether
they accept or oppose a significant transformation is critical. It is here in the
many units of the heartland that promoted changes and innovative steps are
most likely to fail. If the basic units oppose or ignore would-be innovations,
the life of the institution proceeds largely as before. For change to take hold,
one department and faculty after another needs itself t o become an
entrepreneurial unit, reaching more strongly to the outside with new programs
and relationships and promoting third-stream income. Their members need t o
participate in central steering groups. They need to accept that individuals as
well as collegial groups will have stronger authority in a managerial line that
stretches from central officials t o heads of departments and research centers.
The heartland is where traditional academic values are most firmly rooted.
The required blending of those values with the newer managerial points of
view must. for the most part, be worked out at that level. In the entrepreneurial
university, the heartland accepts a modified belief system.
The integrated entrepreneurial culture

Enterprising universities, much as firms in the high tech industry, develop a

work culture that embraces change. That new culture may start out as a
relatively simple institutional idea about change that later becomes elaborated
into a set of beliefs which, if diffused in the heartland, becomes a
universitywide culture. Strong cultures are rooted in strong practices. As ideas
and practices interact, the cultural or symbolic side of the university becomes
particularly important in cultivating institutional identity and distinctive
reputation.
In the transformation of universities, values or beliefs may lead or follow
8 Entrepreneurial Pathways of University Transformation

the development of the other elements. We shall see them in cycles of interac-
tion, themselves developing over time. Organizational values ought not be
treated independently of the structures and procedures through which they
are expressed. An institutional perspective is required. The first four of our five
elements are means by which transforming beliefs are made operative.

I wish to stress again that the conceptualization of these five common

transforming elements developed in the course of research. Initial categories
used during the first year of the study were broad and open-ended. In interviews
I began with the personal background of the respondent and then moved on
to five major topics: the overall character of the university; the nature of leader-
ship, past and present; the relationship between the administration and the
faculty; the bases of financial support; and the shape of research and advanced
training - a category much on my mind from the focus of a prior project.
(Clark, 1995a) The exploratory categories were set out in a paper delivered at
an international conference in the summer of 1994; it appeared later in an
article on "leadership and innovation in universities." (Clark, 1995b) After the
first visits to four of the institutions - Warwick, Twente, Strathclyde, and
Chalmers - I attempted "midstream" to develop more pointed and useful
categories. They were reported in a second conference paper and follow-on
article as a one-year progress report. (Clark, 1996) I used the newly created
common elements during the second round of field visits in 1996 both to clarify
their conceptualization and empirical reach, and to determine if additional
categories were needed. The five features offered a welcomed simplicity among
the many that might have been discussed. Here presented in particularly simpli-
fied form, they become more elaborated when they are plunged into the
complex realities of individual university development.
Without doubt, significant innovation in the character of a university means
that some core tasks and some deep structures are altered to the point where
the long-term course of the organization is changed. Such transforming work
must be done locally, in the university itself. It must extend over years that
often become decades. The sustained work calls for collective action leading to
new practices and beliefs, steps that are entrepreneurial in character, with much
risk-taking and flexible adjustment along the way. When traditional habits are
not enough, universities need to develop an entrepreneurial response. In the
institutional case studies that follow, we will see that response, variously
fashioned in detail, composed of the features that are here identified as basic
elements of transformation.
 7

The Problem of University Transformation

We have seen five European universities in action. each transforming itself

over a period of ten to 15 years by vigorous effort that can be characterized as
entrepreneurial. Each university's development is itself a complex institutional
story, one best told when embedded in contextual peculiarities and unique
features of organizational character. When thus portrayed, the universities
offer different histories, settings, and profiles. We then know Warwick in the
English Midlands as a major research university only three decades old that
faced down hard times in the 1980s and positioned itself to compete with the
best universities in its own country and the world. We know Joensuu in rural
Finland as a minor comprehensive university formed out of humble begin-
nings in the late 1960s that had to take risks and push hard 15 years later
simply to achieve a sustainable niche in its own national system. As a
completely technological university located on the west coast of Sweden we
see Chalmers as a place that has retained a specialized form even as it asserts
innovative strength across a spectrum of fields in engineering and applied sci-
ence and assumes a special status in the Swedish university system. Twente,
hard by the German border in The Netherlands, stands as a technological
university of somewhat broader character, with a growing second focus in
applied social science and its own set of distinctive campus features. Glasgow's
Strathclyde, defined in the British system as Scotland's historic technological
university, has taken on an even more semicomprehensive form where three of
its five faculties (business, education, and the arts) are concentrated in research,
teaching, and service outside science and technology. Five universities, five
128 The Problem of University Transformation

distinct places, conditioned by national and local contexts, different origins

and developmental trajectories, and the commitment and effort of particular
individuals.
But we have also seen that the institutional stories can be framed in a com-
mon conceptual structure. Formed largely from research observations, five
identified elements become generalized pathways of a type of university
transformation which builds upon inquiry and moves an institution aggres-
sively into increasingly competitive orbits of science and learning. The
abstracted pathways serve analytically as middle-range categories. They rise
up from the realities of particular institutions to highlight features shared
across a set of universities, but at the same time they still allow for local vari-
ation. Operating at only a first level of generality, the elements avoid the mists
of vagueness encountered in the rarified atmosphere of unanalyzed academic
abstractions and commencement-day rhetorics that clog academic and public
images of how universities operate and change. My conceptual framework
also shuns sweeping expressions of leadership and mission, reengineering and
empowerment, strategy and stakeholding, the bromides and platitudes of the
dominant management literature of the 1980s and 1990s. (Micklethwait and
Wooldridge, 1996) I have stayed close t o the special features of academic
organization and have sought concreteness in the organized tools of this
particular sector of society. Four elements are highly structural: we observe
them in tangible offices, budgets, outreach centers, and departments. Only the
more ephemeral element of institutional idea, floating in the intangible realm
of intention, belief, and culture, is hard to pin down. Emphasizing manifest
structures helps greatly in explaining the development of organized social
systems. Without doubt, organizational change is sustained when it acquires
ipecific carrying vehicles. Significant change in universities has definite
organizational footing.
With the five-element framework in hand, pinpointing developmental
pathways, we can confront a prior question: is there a generalizable need to
transform lurking in these five cases that may also be deepening in other
universities? Ambition to d o more than currently could be done certainly
played a major role in the examined institutions. Thoughtful administrators
and faculty saw that their institution could not become all that it could be if it
remained in its 1970s form; a revised posture less hobbled by imbedded
constraints was required. In sensing that significant transformation was
compelling, the five universities chosen for study were surely not alone. A few
other institutions in Europe have similarly embarked on a transforming
journey; still others around the world have had cause to contemplate major
change. Confidence in the traditional ways of organizing and operating
academia has been eroding.
In this concluding chapter I want to explore the reasons why other universi-
ties will find themselves treading the entrepreneurial path, or will ignore the
need t o undergo significant transformation at considerable peril. I argue that
 Burton R. Clark 129

widespread features of a rapidly changing university world pressure individual

institutions in many nations t o become more enterprising. If multitudes of
universities need to engage in the hard work of entrepreneurially led change,
then the interrelated elements brought forward in our five-case analysis may
be seen as answers to a global problem of growing university insufficiency.
Modern universities develop a disturbing imbalance with their environments.
They face an overload of demands; they are equipped with an undersupply of
response capabilities. In a demand-response equation of environment-university
relationships they may be seen as falling so badly out of balance that if they
remain in traditional form they move into a nearly permanent stage of
disequilibrium. A tolerable balance requires a better alignment. Transform~ng
pathways are then a means of controlling demand and enhancing response
capability. To orchestrate the elements. institutional focus takes center stage.
The concept of the focused university, on which I conclude, points to a type
of organizational character that growing classes of universities will need for
sustainable development. In evermore turbulent settings, universities can
become robust as they develop problem-solving capabilities built around a flex-
ible focus. But to d o so they must become uncommonly mindful of their
characterological development. Facing complexity and uncertainty, they will
have to assert themselves in new ways at the environment-university interface.
But they will still have to be universities. dominated as ever by educational
values rooted in the activities of research, teaching. and study.

The Demand-Response Imbalance

I remarked in the introduction to this study that national systems of higher

education can neither count on returning to any earlier steady state nor of
achieving a new stage of equilibrium. As principal actors within those systems.
public and private universities have entered an age of turmoil for which there
is no end in sight. Disjuncture is rooted in a simple fact: der?zands 017 utzicersi-
ties outrun tlzeir capacity to respond. From all sides inescapable broad streams
of demands rain upon the higher education system and derivatively upon
specific universities within it:

More students, and more different types of students, seek and obtain
access. Ever more accessible higher education means endless "clienteles"
entitled to various types of education in their lifetimes. The general trend
of elite to mass to universal higher education is well-known. But its effects
in creating endless demands have not been well understood. This chan-
nel of demand in itself, if left unanswered - as in the case of open-door
universities on the European continent - badly overloads the response
capabilities of individual institutions. And as an "environmental"
demand, the clamor for inclusion is organizationally penetrating: it flows
130 The Problem of University Transformation

into, through, and out of universities as applicants become participants

for two, four, six or eight years, and more, only to again negotiate pas-
sage as adult students in continuing education.
More segments of the labor force demand university graduates trained
for highly specialized occupations. At different degree levels, graduating
students expect qualification in diverse specialties. Graduates also need
retraining throughout their professional careers. Thus the training
requirements for the labor force also become virtually endless. This chan-
nel of demand in itself can badly overload universities when answers
have not been found t o control demand and bolster response capabili-
ties. Again, a seemingly "environmental" demand does not merely knock
at the door. Rather, future careers are expressed in a vast array of train-
ing tracks and specialized student careers within the academy. "Output"
boundaries are increasingly permeable.
Patrons old and new expect more of higher education. Those in govern-
ment expect more to be done at lower unit cost. It has become a virtual
iron law internationally that national and regional governments will not
support mass higher education at the same unit-cost level as they did for
prior elite arrangements. As other patrons, particularly industry, invest
in universities, their diverse expectations become pressing. Patronage
shades off into a growing chorus of interest groups repeatedly expressing
their voices. "Accountability" extends in many directions. This stream of
demand also becomes virtually endless. And the viewpoints of the many
patrons also readily cross old university boundaries as group representa-
tives take "their" allotted places on university boards. committees, and
advisory groups.
Most important of all, knowledge outruns resources. N o university, and
no national system of universities. can control knowledge growth. With
expanding knowledge in mind, science experts have long spoken of "end-
less frontiers." Flowing from the research imperative built into modern
disciplines and interdisciplinary fields of study, knowledge expansion.
and specialization, and reconfiguration are self-propelling phenomena.
The unbelievable scale and scope of just the contemporary knowledge base
can be readily illustrated. As of the early-to-mid 1990s. the field of
chemistry produced worldwide a million research articles in less than two
years. Mathematics generated more than a hundred thousand new theorems
a year. The biological sciences fragmented and recombined as well as
produced new knowledge at a rate that required curricular revision of teach-
ing materials every two to three years. Economists have turned their logics
to every sector of society, rapidly creating subfields that concentrate on
such topics as the economics of the family, crime, and social welfare.
Psychology has become 20 and more specialties, some so large that they
 Burton R. Clark 131

break away in national and international associations of their own.

Historians recently produced more literature in two decades than they did
in all previous periods: by proliferating such specialties as the history of
science in nineteenth-century Japan, they endlessly divide attention by
societal activity. historical time, and country. Throughout the humanities
new points of view that contest traditional understandings have emerged
in a confusing jumble, causing some humanists to see the university as an
institution that has lost its soul. And the knowledge produced and
circulated in universities is now greatly extended by the growing array of
knowledge producers located in other sectors of society. Business schools
in universities are only partly responsible for the vast outpouring of books
about business management which had risen in the mid- 1990s to over 2,000
a year, more than five a day.
The point is inescapable: internationally, no one controls the produc-
tion, reformulation, and distribution of knowledge. Fields of
knowledge are the ultimate uncontrollable force that can readily leave
universities running a losing race. Just by itself, the faculty of a
university, department by department, expresses an inexhaustible
appetite for expansion in funding, personnel, students, and space.
Rampaging knowledge is a particularly penetrating demand, rooted in
the building blocks of the system: it shapes basic-unit orientation,
organization, and practice. Since it has no stopping place, it never
ceases. As one field of knowledge after another stretches across
national boundaries and brings more parts of universities into a truly
international world of science and education, growth in knowledge
specialties also becomes the ultimate internationalizing force for the
higher education sector of society.
These four broad streams of endless demand converge to create enormous
demand overload. Universities are caught in a cross-fire of expectations. And
all the channels of demand exhibit a high rate of change.
In the face of the increasing overload, universities find themselves limited
in response capability. Traditional funding sources limit their provision of
university finance: governments indicate they can pay only a decreasing share
of present and future costs. "Underfunding" becomes a constant.
Traditional university infrastructure becomes even more of a constraint on
the possibilities of response. If left in customary form, central direction
ranges between soft and soggy. Elaborated collegial authority leads to slug-
gish decision-making: 50 to 100 and more central committees have the power
to study, delay, and veto. The senate becomes more of a bottleneck than the
administration. Evermore complex and specialized, elaborated basic units -
faculties, schools, and departments - tend to become separate entities with
individual privileges, shaping the university into a federation in which major
and minor parts barely relate to one another. Even when new departments
132 The Problem of University Transformation

can be added t o underpin substantive growth and program changes, the

extreme difficulty of terminating established academic tribes o r recombin-
ing their territories insures that rigidity will dominate. Resources go t o
maintenance rather than t o the inducement a n d support of change.
As demands race on, and response capability lags, institutional insuf-
ficiency results. A deprivation of capability develops to the point where timely
and continuous reform becomes exceedingly difficult. Systemic crisis sets in.
How are universities near the end of the twentieth century sometimes made
sufficient unto their changing environments? How are demand and response
brought into reasonable balance? Adaptive responses that ease the strain take
place at both system and institutional levels. System solutions set the broad
context for university pathways of adaptive action.

The Search for System Solutions

National and provincial systems of higher education primarily cope with

the growing demand-response imbalance by differentiation. Through both
planned schemes and unplanned adjustments, systems sort out gross bundles
of tasks to different types of universities, colleges, and research establish-
ments. (Clark, 1983; Teichler, 1988; Neave, 1996; Meek et al. 1996) Formal
sectors are built: in Europe, universities and polytechnics have often been set
apart; in the United States, universities, four-and-five-year colleges, and two-
year community colleges are commonly separated into a tripartite division of
labor. Additionally, where private institutions exist, they develop individual
niches in the overall national system. Access is thereby differentiated, labor
market relations segmented. and different patrons provide different types and
levels of support and expect different results. Beyond such broad sector separa-
tion further differentiation often occurs among universities: specialized and
comprehensive universities are common in European systems.
But formal differentiation is often strongly opposed. Recently in European
countries, a political tug-of-war has taken place between political parties and
interest groups who want to maintain or construct an integrated, even
homogeneous, single national system and those who stress the advantages of a
formal division of labor. A combination of nominal integration and
operational differentiation has become a useful compromise. While such
institutions as polytechnics and teacher training colleges are blessed with the
university title and brought into an all-encompassing single system, the dif-
ferentiation of institutions, programs, and degree levels continues. The
university label is stretched to give it multiple meanings and usages.
The American system offers an extreme case of the creation of different
types of universities. Private institutions quite freely anoint themselves as
universities; public colleges, state by state, lobby themselves into the university
title. The growing aggregation of 400 or more places called universities has
stretched into a half-dozen major categories: some grant many doctorates and
 Burton R. Clark 133

d o much research; some grant a few doctorates and do a little research; and
some neither grant doctorates nor d o hardly any research. (Carnegie
Foundation for the Advancement of Teaching. 1994) Crossover types readily
appear; e.g., some universities and colleges that are not permitted by state
authorities to award doctorates proceed on their own to develop a research
culture. secure more research funds than some institutions that d o doctoral
work, and link up with other institutions to give a joint doctorate. In Britain,
after the government collapsed the old binary line and allowed polytechnics to
become known as universities. the stretch in meaning of the term became much
greater. A differentiation in resources and teaching and research commitments
that previously took place between two main types of institutions became
greater differentiation within a single formal type.
A "democratization" of titles does not bring full operational convergence:
institutions become known more by what they d o rather than by what they are
called. Hence in national systems and on the worldwide stage we find some
universities heavily concentrated on research and some that hardly d o any at
all; those that give many advanced degrees and others that concentrate almost
completely on the first major degree; those oriented to knowledge for its own
sake and those centered on useful knowledge; some that take u p national roles
and others situated as regional places; and on and on.
Internationally, in the 1980s and 1990s, differential effective access t o
sources of income rapidly became the favorite way to differentiate university
systems. We have seen this national tool operate in Britain, Holland, Sweden.
and Finland. Governmental mainline support with its standardizing effects is
deliberately reduced or allowed to fall as a share of university costs. The system
overall must turn to what we have categorized as second and third streams of
support: each has largely differentiating effects. In research-grant competition.
standardization gives way to winners and losers; research niches occupied by
different universities offer comparative advantage. In exploiting numerous
third-stream sources, universities have different possibilities set by location and
historic capacity. Then as they individually maneuver, struggling to gain more
resources. they widen the differences in specific configurations of external link-
ages. System evolution toward diversified income promotes a dynamic of
institutional diversity and competition. Universities are potentially more
individualized. Patrons are then all the more inclined to think they should
treat unequal things unequally.
In overcoming response inadequacies, national systems of higher education
can go beyond the broadbrush of the differentiation response; they can explore
the utility of reforms by engaging in deliberate institutional experimentation.
In Finnish higher education the process is known as "learning by experiment-
ing." (Vilimaa. 1994) There, recent experiments included the block-grant
budgetary arrangement at Joensuu, the flexible workload scheme piloted at
Jyviiskyla, and several changes explored in other institutions in quality assess-
ment and in the development of a new polytechnic sector. The Finns have
134 The Problem of University Transformation

learned that pilot experimentation is relatively easy to initiate: everyone can

readily agree to have an experiment get underway "because it is meant to be
only a trial and it might fail." The critical moment of "learning by experiment-
ing," for the system at large, comes "when the supporters of the experiment
want to expand it system-wide." (p. 153) Then others can coalesce in opposi-
tion around their doubts and in support of interests that might be weakened:
academic labor unions have resisted in Finland when they anticipated a reduc-
tion in bargaining power and less equity in staff rewards.
One large advantage of experimentation in the search for solutions is that
small-scale efforts at the outset avoid the large mistakes made when central
officials mandate reforms across the entire system without preliminary testing.
Since there is no way by means of prior reasoning that central planners can
know enough about all local contexts and constraints, the Large Plan (or Big
Bang) approach maximizes the scale and scope of unanticipated and undesired
consequences. Centralized governments are biased in favor of this road to
failure.
Systems of higher education are blunt instruments for reform. (For case stud-
ies that reveal bluntness in system efforts to "restructure" higher education in
five American states, see MacTaggart and Associates, 1996) Using the differentia-
tion response, systems can indeed establish broad divisions of labor, implicitly if
not explicitly, that serve somewhat to limit demands made upon particular
universities and colleges. Ministries and coordinating bodies can point institu-
tions toward different combinations of programs and degrees; they can encour-
age different segments to adopt different doctrines supporting particular tasks.
But systems acting from above have great difficulty in activating local initiatives.
In western Europe the reverse has happened: system organization traditionally
has worked to induce institutional passivity and weak local leadership. The
national or state ministry provided administrative services and lumped together
the staff of the university sector in systemwide categories of rank and salary; in
effect, it created membership in a national civil service. Within the universities
senior professors had commanding authority in their separate departments and
institutes. This "continental mode" of state bureaucracy and faculty guild left a
weak middle - the elected short-term rector assisted by only a small central staff
and surrounded by congregations of powerful professors. (Clark, 1983, pp.
125-129) The "British mode" of authority structure was just a half-step away,
with only modest authority located in vice-chancellorships (compared to that of
American university presidents) and a web of faculty committees in and around
an academic senate very involved in the consideration of change. Weak
institutional steering became the norm. With some strengthening of rectorial
authority and the enlarging and professionalizing of central staff. this pattern
changed somewhat in many European universities in the 1970s, 1980s, and early
1990s, but not enough to constitute a sturdy response capability with which to
face mounting and fast-moving demands. The weak center has severely limited
the university capacity to change. Thus, the bluntness of system initiatives amidst
 Burton R. Clark 135

the growing scale and complexity of the university sector has coexisted with a
structured lack of initiative at the institutional level.
Weak capacity to balance demand and response, we should note, varies
somewhat between one-faculty and multifaculty universities. Although they
do not escape the problem of deepening imbalance, specialized universities are
better positioned than the comprehensive institutions to control demand
around their subject specialization and, with a more integrated character, to
pursue an entrepreneurial response. Their subject concentration helps measur-
ably to solve the growing problem of institutional focus. It is no mystery why
in Europe or America, or elsewhere, specialized universities can more readily
move toward entrepreneurial postures than comprehensive ones, particularly
if their specialty is technology or business. When I sought nominations of
universities for this study, it was no accident that the institutions named by
knowledgeable European colleagues, including ones not chosen for study,
turned out often to be specialized places, for example, the technologically
oriented University of Compiegne in France, the business-administration
oriented University of St. Gallen in Switzerland.
In contrast, the imbalance thesis applies strongly to comprehensive public
universities. Organized around a wide array of subjects that stretches from
classics to medicine, these institutions virtually promise higher officials, legisla-
tors, and the general public they will be all things for all demands. Martin
Trow (1970, pp. 184-1 85) noted a quarter-century ago in an analysis of "elite"
and "popular" functions of modern higher education that responding to
external needs and demands was even then fast becoming an endless task:
If one popular function is the provision of mass higher education to nearly
everybody who applies for it, the second is the provision of useful knowledge
and service to nearly every group and institution that wants it. . . the demand on
the universities for such service is increasing all the time. This in part reflects the
growth of the knowledge-base created by the scientific explosion of the past few
decades. N o t only is much of this new knowledge of potential applied value to
industry, agriculture, the military, the health professions. etc., but also new areas
of national life are coming to be seen as users of knowledge created in the
university.
The implicit commitment of universities to embrace all of the expanding
knowledge core of modern society deepened the commitment both to extend
access and to service the interests of outside groups with diverse bundles of
relevant knowledge and useful training. System management has been unable
to control this explosion in commitments: overloaded universities have simply
become more overloaded.
Other observers have also taken early note of the increasing imbalance.
Based on a study of 17 universities and colleges then under stress, David
Riesman warned in the 1970s against the danger of institutions overextending
their resources in order to be all things to all people. (Riesman, 1973, p. 445)
Two decades later, in the 1990s, the tendency to overextend resources has
136 The Problem of University Transformation

become more marked a n d the results more painful. Based on site visits a n d
interviews in the mid-1990s at 13 colleges and universities in the American
system, Leslie a n d Fretwell found there "was broad recognition that mis-
sions had become too loose, that t o o many different programs were being
offered, and that scarce resources were being spread too thin across too
many activities." (Leslie a n d Fretwell, 1996, p, xiv) Administrators a n d
faculty "reported (and lamented) that they had made t o o few hard deci-
sions" during the previous two decades. Their lament "was frequently
punctuated with one phrase: 'we have tried too hard to be all things t o all
people,' with the unspoken trailer [that] 'we have become t o o diffuse to use
our scarce resources well'." (p. 22) These American observers concluded
that "a theme. . . ran throughout our site visits: being distinctive a n d
purposeful is better than being all things to all people." ( p. 16) And
institutional strain this time, in the 1990s, was seen by participants as
systemically different from periods of stress in the past: "It is a common
refrain among those with whom we have consulted to suggest that things
are not going t o be the same this time, or ever again." (p. xii)
The differentiation response, it seems, finally comes down to the individual
university. Each university has always had unique features that stem from
geographic location, genetic imprints, student backgrounds, idiosyncratic
historical developments, faculty strengths and weaknesses. and the play of
particular personalities. Now, particularly as knowledge outruns resources, a
vniversity's basic departments are under ever greater pressure to commit to
specialties that differentiate them from their peer-discipline departments at
other universities, whether in physics or psychology or history. And what hap-
pens among departments and faculties radiates upward to intensify the need
for entire universities to differentiate themselves in niches of knowledge,
clientele, and labor market linkage. Such differentiation can be left to drift,
and hence to occur slowly; but with accelerating change, the costs of drift and
delay rise - the demand-response imbalance only deepens. Institutional action
then has to be set in motion.
System organizers can help to clear the way by reducing state mandates and
manipulating broad incentives, but only universities themselves can take the
essential actions. The point was made in striking fashion by Clark Kerr in
1993 (p. 33, emphasis added) when he stressed that
For the first time, a really international world of learning, highly competit~ve,is
emerging. If you want to get into that orbit. you have to d o so on merit. You
cannot rely on politics or anything else. You have to give a good deal of autonomy
to institutions for them to be dynamic and to move fast in international competi-
tion. You have to develop entrepretleurial leadership to go along with institutiot7rtl
aLitonotTiy.

Enter the growing necessity of what we can now call "the entrepreneurial
response."
 Burton R. Clark 137

The Entrepreneurial Response

If the state and other external patrons cannot exercise the required initia-
tive, how can universities shift from a passive to an active mode? As histori-
cally constituted, their internal faculties and departments cannot separately
d o the job. Oversight of their particular fields and protection of their own
material interests has been their customary mandate. Only an overall
organizational realignment, constructed in a first approximation by the ele-
ments captured in this study, can set into motion a new highly active mode.
The five cases and certain relevant studies can help to place those elements in
the broader framework of the imbalance thesis.

The strengthened steering core

Warwick, Twente, Strathclyde, Chalmers, Joensuu - all exhibited in 1995 a

greater systematic capacity t o steer themselves than they had possessed 15
years earlier. That ability did not take any one form. It could be relatively
centralized or decentralized, generally appearing in practice as a locally unique
combination of the two - a "centralized decentralization." (Henkel, 1997, p.
137) At a given time this evolving steering capability appeared in different
institutions at different stages of development and in degree. It could have
been initiated by strong-minded change agents, figures drawn to leadership
positions from within or without who wished to break the cake of custom. But
in the sustained work of implementation such personal leadership commonly
gave way to collegial groups. Stronger line authority also appeared: rector's
office to dean to department head, or, in flat structures that bypass deans,
from center to department head. Individuals and groups were held account-
able.
Most important, the administrative backbone fused new managerial values
with traditional academic ones. Management points of view, including the
notion of entrepreneurship, were carried from center to academic heartland,
while faculty values infiltrated the managerial space. The blending of perspec-
tives worked best when academics who were trusted by peers served in central
councils and took up responsibility for the entire institution. Since the underly-
ing traditional academic culture cannot be ignored, cannot be pushed aside, it
must be put to work and thereby adapted. Central faculty involvement became
a crucial step in avoiding what the academic staff would otherwise see as hard
managerialism, too much top-down command. In the hard work of
transformation in these cases and elsewhere, much depends on how well
managerial and faculty values become intertwined and then expressed in daily
operating procedures.
Whatever its shape. the strengthened managerial core consists of agents
who work to find resources for the institution as a whole. They seek other
138 The Problem of University Transformation

patrons instead of waiting passively for the government to return to full fund-
ing. They work t o diversify income and thereby enlarge the pool of discretion-
ary money. They seek out new infrastructure units that reach across old
university boundaries to link up more readily than traditional departments
with outside establishments, especially industrial firms. The core gives the
institution a greater collective ability to make hard choices among fields of
knowledge, backing some to the disadvantage of others; this in turn shapes
access possibilities and job-market connections. The strengthened steering
mechanism is necessary for the task of cross-subsidizing among the university's
many fields and degree levels, taxing rich programs t o aid less-fortunate ones
that otherwise would be relegated to the corner or even dropped from the
enterprise because they cannot pay their way. Agents of the core thereby not
only seek to subsidize new activities but also try to enhance old valuable
programs in the academic heartland. As much maneuvering among contradic-
tory demands becomes necessary, the agents of the constructed core become
institutionally responsible for doing so.
A strengthened administrative core, then, is a mandatory feature of a
heightened capability t o confront the root imbalance of modern universities.

The enhanced development periphery

The new peripheries that enterprising universities construct also take quite
different specific forms. They variously consist of outreach administrative units
that promote contract research, contract education, and consultancy. They
include a varied array of research centers that are generally, but not always,
multi- or transdisciplinary. The new units and centers may be closely or loosely
linked to the steering core and the heartland departments. Like science parks
that become autonomous, some peripheral units may have the name and
sponsorship of the university but then operate much like mediating institu-
tions situated between the university and outside organizations. Again, there is
no one way, n o one model to emulate.
But the developmental peripheries we have observed have a valuable com-
mon outcome: they move a university toward a dual structure of basic units in
which traditional departments are supplemented by centers linked to the
outside world. The matrix-like structure becomes a tool for handling the
inevitable growth of the service role of universities. Department-based
"specialist groups" are complemented by "project groups" that admit external
definitions of research problems and needed training. The new groups cross
old lines of authority; they promote environmental linkages in their daily
practice. We noted at Chalmers that they can even effect reciprocal knowledge
transfer; the university learns from outside firms as the companies learn from
the university. The matrix structure allows for more temporary units, thereby
introducing flexibility amidst stability. With tenured staff mainly based in the
departments and nontenured and part-time staff often predominating in the
 Burton R. Clark 139

outreach centers, the more temporary units of the periphery are more readily
disbanded.
Since units of a developmental periphery extend, cross, and blur
boundaries, they can decisively shape the long-run character of a university.
They can develop new competencies close to useful problem solving. They
can generate income that helps to diversify funding. They answer the call
for interdisciplinary efforts. But if not judged by academic values as well as
managerial and budgetary interests for their appropriateness in a university,
they can move an institution toward the character of a shopping mall. A
connected and somewhat focused construction of the periphery requires a
collective institutional capacity to make choices based on educational values.
New outward-looking units can make the problem of overall institutional
focus all the more difficult: research centers contend with old departments,
transdisciplinary perspectives with disciplinary orientations, the useful with
the basic, the outward-looking with the inward-oriented. But when care-
fully monitored, the periphery becomes a second virtually essential element
with which to lessen the imbalance between environmental demands and
response capacity. Traditional departments alone cannot effect all the
needed linkages: in themselves, they cannot add up to an effective focus.
The new periphery is necessary, even if it adds to the organized complexity
of the university.
As a halfway house to the outside world, the developmental periphery
becomes an organized location within a university for the entry and absorp-
tion of whole new modes of thinking. In ideal typical terms formulated by an
international study group in the mid-1990s, their designated "Mode I " refers
to the traditional way of handling knowledge in disciplinary frameworks. A
newly emerging "Mode 2," transdisciplinary and problem-oriented, was seen
by the study group as located largely outside universities in a host of
knowledge-centered enterprises that stretch from major industrial laboratories
to policy think tanks to management consultancies to new small and medium-
sized enterprises. (Gibbons et al, 1994; see also Ziman, 1994) Between the ideal
types there lies a lengthy continuum of different practical combinations. The
peripheries of universities we observed in this study incorporate much Mode
2. Their units are established precisely to go beyond disciplinary definitions:
they extend university boundaries to bring in the perspectives of outside
problem-solving groups; they are prepared to take their leads from the outside
and to work close to application. They are often strongly committed to the
straight-on production of useful knowledge.
An enhanced developmental periphery plays many roles in enterprising
universities, not the least in bringing new modes of thinking and problem solv-
ing within newly stretched boundaries. Organizationally, in Peter Scott's terms,
it helps to stretch the "core" university into the "distributed" university, where
knowledge, the primary commodity, is more "applications-generated." (Scott,
1997, pp. 11-14)
140 The Problem of University Transformation

The discretionary funding base

Demand overload hits hard at the core support of universities. Student

growth and knowledge growth together increase enormously the costs of
systems of higher education and individual universities. Higher costs then
change the relationship of universities to their principal patrons, especially
funding ministries. If higher education in earlier days had been a minor charge
in governmental budgets, it now becomes a major expenditure. As a big-ticket
item, university support moves up the agenda of governmental concerns and
is thrown into direct competition with other major interests. Politicians pay
attention. They put universities on their personal and party agendas. The sheer
happenstance of where university support is decided in the state bureaucratic
and legislative structure can even become critical, variously contending with
the major sums sought by schools, welfare agencies, health departments,
prisons, agricultural interests, and the military. Even in good times of rising
state income and outlay, governments then seek to control higher education
costs. In bad times of general retrenchment they insist on major cuts. They
issue dire warnings in statements that echo internationally that the future will
bring even more constraint. Government becomes an uneven patron, often
acting like a sometime purchaser of university services; it can hardly be
depended on in the long term. Its own changing agenda will at times give
overwhelming priority to coping with depression, national debt, and
international entanglements.
Traditional universities come to a fork in the financial road. They can pas-
sively fall in line and undergo parallel financial increases and decreases - as
the government goes, so they go - with the governmental stimulus determin-
ing university response; or they can actively intervene by deciding to develop
additional lines of income from pursued patrons. University ambition encour-
ages the second choice, competition virtually demands it. Such budgetary activ-
ity is a crucial step in university entrepreneurship. Active cost containment is
also then given a high priority by the institution itself, from central staff to the
many departments and units in the academic heartland and the developmental
periphery.
To build a diversified funding base in a university is to construct a portfolio
of patrons to share rising costs. As new patrons contribute, their expectations
of what they should get in return readily intrude to become new constraints.
Universities then need greater self-consciousness on where they draw the line
between what they are willing to do and not do to meet those demands. The
collective will, located in the steering core, then comes into play to define new
limits around greatly expanded boundaries; heartland departments also have
to test their own edges of legitimacy.
But whatever the relations with specific patrons, a diversified funding base
enhances university discretion. The enlarged portfolio of income streams
increases total resources. It allows a university to "roll with the punches"; a
 Burton R. Clark 141

loss here is replaced by a gain there. It allows a university to build reserves

(and to borrow monies) and then to take innovative steps, as Warwick did
when it used accumulated surpluses from its earned income to fund a new,
striking research fellowship scheme. Diversity in financing, it now appears,
"can be regarded as a prerequisite for adaptability." (Holtta, 1995, p. 56) The
multistream financial base enhances the evermore important capacity to cross-
subsidize internally: top-slicing and redistribution of funds by central com-
mittees tap the monies brought in by some fields and activities to aid others
judged to be necessary and needy. Cross-subsidy becomes the financial heart
of university integration. (Massy, 1994; Williams, 1995)
The internal disposition of funds raised through diversified sources is
always contentious and never permanently solved. Professors and depart-
ments active in bringing in money d o not like to see some of it passed off to
others who are not, especially if the other departments appear to be lost in
mists of conceptual ambiguity, even bogged down in self-imposed disarray.
The greater the internal dispersion of fields and interests, the greater the
need to have the haves help the have-nots. A n d the more contentious the
issue of internal redistribution becomes. Comprehensive universities have
great difficulty in moving money across the gulf between, for example, phys-
ics and classics as specific fields or more broadly between engineering and
the humanities. Cross-subsidization may flow from teaching to research, or
in some cases in the reverse direction. It may flow across levels of educa-
tion, from undergraduate to graduate, or the other way around. Certainly a
primary issue in diversified funding, it is central to the making of choices
leading to better focused universities.

The stimulated heartland

Since universities consist of widely divergent fields in their traditional

departments, enterprising action typically spreads unevenly in the old
heartland. Science and technology departments commonly become
entrepreneurial first and most fully. Social science departments, aside from
economics and business, find the shift more difficult and commonly lag behind.
Humanities departments have good reason to be resisting laggards: new money
does not readily flow their way from either governmental or nongovernmental
patrons. Deliberate effort on their part to go out and raise funds by offering
new services may seem particularly out of place, even demeaning. Since
departmental adoption of an entrepreneurial attitude will normally vary, a
university that has partially transformed itself to be more enterprising might
largely exist in a schizophrenic state, entrepreneurial on one side and traditional
on the other. Administrators and faculty at the five universities studied rejected
this option. Schizophrenic character did not appeal to them: it suggested a
split that would mean endless, bitter contention. If that were to be the outcome,
142 The Problem of University Transformation

then the move into entrepreneurial action might well be more trouble than it
was worth: doubters in other universities would be right.
Overall scale and scope are perhaps decisive here. Small to middle size
universities - 6,000 to approximately 13,000 in our five cases - are still
positioned to seek a unified character, even if they stretch from microbiology
to folklore. An integrated identity has much to offer: perceivable gains outweigh
apparent losses. But large universities of 20,000, 30,000, 50,000 and more,
particularly when organized in large stand-alone faculties or schools - the
dominant form in Europe and in much of the world - might well find that
entrepreneurial habits d o not spread well across their major parts. They might
then be forced to operate with an entrepreneurial/traditional split in character,
with minimal interaction and little or no cross-subsidy across major
components. The entrepreneurial side could depend on diversified income and
look to new forms of outreach and knowledge production. The traditional
side could depend on mainline allocation based on student enrollment and
degree output as the foundation for the future.
Impressive in the universities studied was the extent to which the heartland
departments had bought into entrepreneurial change. Their changeover has
not been easy, not even in the specialized institutions most fully based on sci-
ence and technology. Even in science departments professors may be commit-
ted to knowledge for its own sake in a way that excludes applied interests. But
the distinction between basic and applied has steadily blurred and science
departments can typically find foci that combine the two. In the social sciences
and humanities, as we have seen. departments also find new ways to be
educationally useful as they relate to new demands with, for example. policy
analysis and multimedia explorations. One traditional department after
another finds educational as well as economic value in becoming a more
enterprising basic unit.
Stimulated academic departments must find ways to fuse their new
administrative capability and outreach mentality with traditional outlooks in
their fields. Academic norms operate close to the surface: they define whether
changes are "up-market" or "down-market." Departmental entrepreneurship
that leads to shoddy goods, as defined by other academics, can readily set in
motion a vicious circle of declining reputation and less selective recruitment
of staff and students. Departments have to make clear that they are not willing
to respond to all demands that swirl around them in their respective fields of
activities - from potential students, young and old, industrial firms and profes-
sional associations, local, regional, national, and international governmental
departments. They have to select and thereby to focus. When carried out
effectively, a widespread embodiment of entrepreneurship in a university
strengthens selective substantive growth in its basic units.
 Burton R. Clark 143

The entuepuerreuvial belief

The most difficult part of this study's analysis was t o grasp organizational
ideas and beliefs a n d relate them to structures that support processes of
change. A long-standing popular misconception places a Great Person with
a Large Idea at the front end of change. A modern derivative of this view
depicts a chief executive officer o r management team formulating at the
outset a global strategic plan. Idea becomes purpose, a mission statement
soon follows. and all else becomes means to a prechosen end. But the reality
of change in complex organizations. especially in universities. is different.
New, institutionally defining ideas are typically tender a n d problematic at
the outset of an important change. They must be tested, worked out. and
reformulated. If they turn out to be utopian. they are soon seen as
counterproductive wishful thinking. If found to be excessively opportunistic.
they provide n o guidance: any adjustment will do. Ideas become realistic
and capable of some steering as they reflect organizational capability and
tested environmental possibilities. New organizational ideas are but
symbolic experiments in the art of the possible.
An institutional idet1 that makes headway in a university has to spread
among many participants and link up with other ideas. As the related ideas
become expressed in numerous structures and processes, and thereby endure,
we may see them as institutional beliefs that stress distinctive ways. Successful
entrepreneurial beliefs, stressing a will to change. can in time spread to embrace
much and even all of a n institution, becoming a new culture. What may have
started out as a simple or naive idea becomes a self-asserting shared view of
the world offering a unifying i d e t ~ t i t j A
. transformed culture that contains a
sense of historical struggle can in time even become a saga, an embellished
story of successful accomplishment. Our five universities have moved along
this ideational road.
Such cultural transformation at Warwick started out in the early 1980s with
the tender idea that it would "earn" its way. With growing success, the earned
income approach became a sturdy belief that here was an unusual British
university aggressively developing new sources of income. new patterns of
organization. and new productive relationships with the outside world. True
believers dominated the steering core and became more numerous in a
campuswide culture. Outsiders took special note. By its twenty-fifth year, the
university was uncommonly well-equipped symbolically to celebrate itself with
an enriched story of "the Warwick way." An organizational saga was emerg-
ing.
Twente started its move in the early 1980s with an almost defiant assertion
that it was "the entrepreneurial university," hardly knowing what that would
mean in practice. It turned out to mean that Twente would develop a
strengthened managerial core and a newly devised developmental periphery
and the other operational elements this study has identified. Spreading out in
144 The Problem of University Transformation

the academic heartland, the initial simply stated idea became an embedded
belief, then a widespread culture. By the mid-1990s this small place claimed a
rugged identity formed around a recent history of largely successful struggle:
a saga was on its way. Twente came to believe in itself to the point of making
vigorous efforts to spread its particular attitudes and special operational forms
to others: it took up leadership in an emerging small circle of European self-
defined "innovative universities."
The leading idea at Strathclyde in the early 1980s was not sharply
formulated. A new vice-chancellor felt strongly that the place had to become
more managerial, more businesslike, more able to stand on its own feet. If it
were to prosper it had to be run differently. In time, the initial managerial idea,
expressed in a distinctive central steering group, a productive periphery, and
an entrepreneurial "spirit" in some heartland departments became folded into
a generalized belief system of "useful learning." This doctrine embraced two
hundred years of development while it asserted a will to work with industry
and government to solve current problems. The Strathclyde doctrine of useful
learning only needed to be slightly embellished and romanticized, as exempli-
fied in the bicentennial celebration I described, in order to become an
organizational saga.
Chalmers self-consciously began to assert in the early 1980s a commitment
to "innovation." As the idea and related practices were worked out, a sense of
difference grew. A long-standing Chalmers "spirit" was intensified to become
an embracing culture that helped predispose the institution to take up in 1994
the highly unusual status of a foundation university, an institutional definition
that nearly all other Swedish universities were unable or unwilling to consider.
The sense of distinctiveness was thereby further extended. intensifying overall
identity. In this ideational part of the quest, deeply rooted cultural features
have become parts of a Chalmers saga in which past developments, current
intentions, and future character are depicted as closely linked. Chalmers
enthusiasts could readily say in the mid-1990s that their place was something
different in the state of Sweden. They also had confident reason to believe that
a similar entrepreneurial culture will increasingly appear in other Swedish
universities.
Joensuu in the mid-1980s took to an idea of becoming a pilot institution
that would experiment with an important basic change for the entire Finnish
national system of universities. In its national setting the idea of doubly
decentralizing budget-based control all the way down to the department level
was a radical one. Joensuu effected the idea to the point of departmental
dominance. Early acceptance of a second idea, piloted at another university,
that of flexible workloads, helped to make the institution significantly differ-
ent from those operating in traditional Finnish style. As the "piloting" ideas
worked their way into the fabric of the institution, Joensuu has grown up
symbolically as well as physically, strengthening its sense of self and its place
in the world.
 Burton R. Clark 145

We have noted repeatedly throughout this study that the five elements of
transformation become just that by means of their interaction. Each by itself
can hardly make a significant difference. Those who see universities from the
top-down might readily assume that the strengthened steering core is the lead-
ing element. But a newly constituted management group, for example, is soon
without teeth if discretionary funds are not available, new units in the periphery
cannot be constructed, heartland departments fall into opposition, and the
group's idea of a transformed institution gains no footing. The interaction of
transforming elements also largely takes place incrementally over a number of
years. Our results accord strongly with an incrementalist view of organizational
change. (Lindblom, 1959, 1979; Redner, ed., 1993) Particularly for universities,
we stress interactive instrumentalism. Transformation requires a structured
change capability and development of an overall internal climate receptive to
change. As we have seen by reviewing development over ten to 15 year periods,
the building of structural capability and cultural climate takes time and is
incrementally fashioned. Action taken at the center requires faculty involve-
ment and approval. Change in new and old units in the periphery and in the
heartland is piecemeal, experimental, and adaptive. The operational units,
departments and research centers, remain the sites where research, teaching,
and service are performed: what they do and do not do becomes finally central.
As put sharply by David W. Leslie (1996, p. 110) in arguing against linear-
rational views of strategic planning: "change in colleges and universities comes
when it happens in the trenches; what faculty and students do is what the
institution becomes. It does not happen because a committee or a president
asserts a new idea."
Even in the business world, we may note, careful analysts who trace
organizational change over many years observe that successful firms essentially
engage in "cumulative incrementalism": they inch forward by making rapid
partial changes. Firms choose to "spread and minimize risks by initiating many
different projects," rather than try to engage in large-scale strategic change.
(Stopford and Baden-Fuller, 1994, p. 523) They engage in "concentric
entrepreneurialism." Even in business. leadership is depicted as a diffused
phenomenon: '.Leadership is acutely context sensitive. . . The need may be for
more than one leader over time if performance is to be maintained. Equally
important may be the creation of collective leadership at a senior level. . . which
may then be supported by the development of a sense of complementary
leadership at lower levels. Leading change involves action by people at every
level of the business." (Pettigrew & Whipp. 1991, pp. 280-281) And from a
third careful business analyst: "Capabilities grow through the actions of the
members of the firm - through the behaviors of employees at all organizational
levels." (Leonard-Barton, 1995, p. 28)
146 The Problem of University Transformation

Such findings from sustained analysis of business firms over years of

development concur with developmental studies of universities: leadership can
be an attribute of groups; entrepreneurship is a phenomenon of total organiza-
tions and their many collective parts. "The entrepreneurial response" on which
we have concentrated 1s an all-university capability.

The Focused University

The entrepreneurial response to the growing imbalance in the environment-

university relationship gives universities a better chance to control their own
destinies. The response may be seen as a way to recover the autononly lost.
particularly in public universities. when mounting demands began to dominate
the capacity of universities to respond. The new autonomy is different from
the old. In an earlier day autonomous public universities could be given full
state support and largely left alone to educate a few students, engage in limited
basic research. and prepare professionals for several fields of work. When only
one young person in 20 sought university training, most people most of the
time did not think about what the university was doing and what it could do
for them. Fields of research were simpler, knowledge growth, while moving at
a striking pace, could still be grasped. As the end of the twentieth century
approaches. however. the demand side of the environment-university relation-
ship has spun out of control and institutional response has become increas-
ingly insufficient. Now when virtually everyone can demand some involvement
or relationship, loosely coupled universities have offered ad hoc. diffuse
responses.
Universities are caught up in grand contradictions: with less money, d o
more and more; maintain as always the expanding cultural heritage, the best
of the past. but quickly and flexibly develop new fields of study and modes of
thought: relate to everyone's demand because all are "stakeholders." An
American university president crisply formulated in the mid-1990s that the
modern research university (public a i d private) has become "overextended,
underfocused: overstressed, underfunded." (Vest, 1995) Alert rectors and vice-
chancellors in Europe could readily agree, recognizing that not only can the
condition of underfunded lead to a sense of being overstressed. but that
"underfocused" and "overextended" may be virtually two sides of the same
institutional posture.
The entrepreneurial response offers a formula for institutional develop-
ment that puts autonomy on a self-defined basis: diversify income to increase
financial resources. provide discretionary money, a n d reduce governmental
dependency; develop new units outside traditional departments to introduce
new environmental relationships and new modes of thought and training:
convince heartland departments that they too can look out for themselves.
raise money, actively choose among specialties, and otherwise take on an
entrepreneurial outlook; evolve a set of overarching beliefs that guide and
 Burton R. Clark 147

rationalize the structural changes that provide a stronger response capability;

and build a central steering capacity to make large choices that help focus the
institution. The entrepreneurial response in all its fullness gives universities
better means for redefining their reach - to include more useful knowledge, to
move more flexibly over time from one program emphasis to another. and
finally to build an organizational identity and focus. Warwick, Twente,
Strathclyde, Chalmers, and Joensuu have all in somewhat different specific ways
shown us how to focus university reach.
Universities need foci that help them solve the problem of severe imbalance
and to define anew their societal usefulness. They need to find sustainable
niches in the ecology of a knowledge industry that becomes more international
and more dispersed among institutions outside formal higher education. The
difficulties are huge. Comprehensive universities, those of wide scope, in
Europe, America, and elsewhere will remain under great popular and
governmental pressure to cover the broadest possible range of subjects and
interests. Scattering their promises, and in many cases unable to cap their size.
they will continue to tend to spread in a virtually uncontrolled fashion. They
take on even more tasks and expectations, undercutting the possibilities of
building a critical mass of resources, faculty, and students in different basic
units. To contain unbridled comprehensiveness. choices have t o be made about
the relative magnitude of beginning and advanced levels of study, different
services to clienteles and occupations, and especially about fields of knowledge
to highlight and downplay. And within every field choices have to be made to
pursue certain specialties while ignoring others. If such choices are not made,
then all units and subunits simply receive fair shares on the downslope of
limited resources and hardened structures. Steering is left to the mercy of sunk
costs.
As active university postures come to the fore, we find they can have posi-
tive effects on university character that are not anticipated in traditional
thought. The entrepreneurial pathways tend to build coherence. A university
becomes more willing to assert to the outside world that it is different, even
distinctive. The whole institution can legitimately claim that it has its act
together and is thereby better prepared to cope with the confusing complexity
and rising uncertainty characteristic of modern higher education. A reputa-
tion of coherent competence provides a symbolic bridge to the environment
for a favorable gathering of money, staff. and students.
As entrepreneurial responses multiply. universities become more individual-
ized. To make the point in striking fashion, that higher education is not one
thing and it has no one future, the Carnegie Council of the 1970s entitled their
last report on the U.S. system Tlzree Tlzousand F~~tures. (Carnegie Council,
1980) Actively forming their owl1 character in different specific contexts. and
developing different specific strengths and weaknesses, entrepreneurial
universities, anywhere in the world, similarly develop their own distinctive
futures. Rather than praising homogeneity. they put their trust in diversified
148 The Problem of University Transformation

capability - a posture appropriate for an evermore complex and competitive

domain.
An entrepreneurial achievement of distinctiveness serves internally to unify
an identity and thereby, ironically, to rebuild a sense of community.
"Entrepreneur" may continue to be a negative term in the minds of traditional
academics, all the more so after they have seen hard managerialism in action.
They may go on thinking of entrepreneurship as raw individualistic striving
that is socially divisive. They may continue to fear that a traditional academic
community, assumed to exist, will be fragmented if entrepreneurial behavior
takes over. However, diffuse in structure and fragmented in intent, traditional
European universities, and many others around the world, have had little or
no common symbolic a n d material integration. What integration they have
had is steadily eroded by increasing scale and scope. Collective entrepreneur-
ship overcomes their scattered character, leading toward a more integrated
self. When entire departments a n d faculties are assertive, and especially when
a whole university takes on an entrepreneurial character, the old
understandings are turned upside down. Academic groups, small and large,
then see themselves in common situations with common problems, common
allies, and common enemies, and in need of common action. A common culture
grows, an identity is shared.
Collegiality is then put t o work in a different way. Bernard J. Shapiro
(President, McGill University) and Harold T. Shapiro (President, Princeton
University) have cogently argued that collegiality is normally "biased in favor
of the status quo - not t o mention the status quo ante." The challenge is "to
redefine our understandings and commitment so that, in empirical terms,
collegiality and difficult choices are not mutually exclusive." (1995, p. 10) The
collective forms of entrepreneurship captured in this study change the equa-
tion. They put collegiality t o work in the service of hard choices. Collegiality
then looks to the future. It becomes biased in favor of change.
Self-defining, self-regulating universities have much to offer. Not least is
their capacity in difficult circumstances to recreate an academic community.
Toward such universities, the entrepreneurial response leads the way.